Net profit of public sector banks (PSBs) recorded around 26 per cent growth during the April-September period of current fiscal, Finance Ministry said on Tuesday.
A Ministry statement said that the net profit rose to over ₹85,000 crore during first half of the current fiscal, showing a growth of 25.6 per cent year-on-year.
As on now, there are 12 public sector banks and these include State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Indian Bank, Indian Overseas Bank, Bank of India, Union Bank, UCO Bank, Central Bank, Bank of Maharashtra and Punjab & Sind Bank.
“The reforms and regular monitoring have addressed many concerns and challenges, and resulted in setting-up enhanced systems and processes for credit discipline, recognition and resolution of stressed assets, responsible lending, improved governance, financial inclusion initiatives, technology adoption etc,” the statement said. Further, it added that these measures have led to a sustained financial health and robustness of banking sector as a whole which is reflected in the current performance of the PSBs.
The Ministry acknowledged that PSBs have also shown significant progress in adopting new age technologies like AI, cloud computing, blockchain etc, and upgradation of existing digital infrastructure, putting in place necessary systems and controls to tackle cyber security risks and taking multiple steps to provide best-in-class customer services.
The Ministry noted that review meetings chaired by the Union Finance Minister facilitated deliberations on a range of current and emerging issues with the Chief Executives of PSBs. In one such meeting held in August, it was noted that during FY24, PSBs performed well across all financial parameters. This was evidenced by improved asset quality with net non-performing assets (NNPAs) declining to 0.76 per cent, sound capital adequacy at 15.55 per cent, net interest margin (NIM) at 3.22 per cent and highest ever net aggregate profit of ₹1.45 lakh crore with the dividend of ₹27,830 crore to the shareholders. Improvements across various parameters have also enhanced the ability of PSBs to raise capital from the markets.
The Ministry highlighted that major banking reforms, such as implementation of enhanced access and service excellence (EASE), enactment of Insolvency and Bankruptcy Code (IBC), establishment of a robust governance framework, the setting up of National Asset Reconstruction Company Ltd (NARCL), and the amalgamation of PSBs among others, have been undertaken in the recent years. All these measures are showing positive outcomes.
